Moody's said it was concerned over China's incomplete implementation of much needed reforms.

High debt burden

"Without credible and efficient reforms, China's GDP growth would slow more markedly as a high debt burden dampens business investment and demographics turn increasingly unfavourable," Moody's said in a note.

"Government debt would increase more sharply than we currently expect."

But the ratings agency did confirm China's current Aa3 rating, saying that there was still time to address the current economic imbalances and implement reforms.